Intellectual property law is good. Excess in intellectual property law is not. This blog is about excess in Canadian and international copyright law, trademarks law and patent law. I practice IP law with Macera & Jarzyna, LLP in Ottawa, Canada. I've also been in government and academe. My views are purely personal and don't necessarily reflect those of my firm or any of its clients. Nothing on this blog should be taken as legal advice.

Saturday, July 25, 2015

Access Copyright Gets its Wish for a Post-Secondary Tariff Hearing at the Copyright Board

In its Ruling
of December 4, 2013, the Board denied Access’ application to consolidate the
examination of the above-cited tariffs for essentially two reasons. First, the
Board did not want to disrupt the then current proceedings in respect of the
period 2011-2013, slated for a hearing that was to begin two months later, by
adding new issues for examination. Second, it did not want to be in a position
to have to certify a tariff for the period 2014-2017 on “what may happen” in a
then potentially unstable market.

The first
reason is now moot, and the second, much less relevant. Parties are now in a
better position to provide useful information on this new, 2014-2017 period. In
addition, both Access and Mr. Maguire agree that the consolidation would reduce
costs for the parties. The Board thus confirms the consolidation of the
examination of the above-cited tariffs.

No later
than Wednesday, July 8, 2015, Access Copyright shall propose a
process and a schedule for a
hearing to start on Tuesday, January 19, 2016. This process
should minimally provide for the filing of a supplementary statement of case by
Access, the filing of a supplementary statement of case by Mr. Maguire and a
reply case by Access. Mr. Maguire is allowed to respond to Access’ proposed
process and schedule no later than Friday, July 10, 2015.

Finally, Access shall provide answers to the
Board’s questions of June 3, 2015 (attached, for convenience) as part of its
supplementary statement of case.

As the Board is aware, Access
Copyright licensed post-secondary institutions under consensual
agreements in the period 1991 to 2010.
Beginning in 2011, a number of post-secondary
educational institutions chose not to renew their licences with Access
Copyright. Some institutions paid royalties
under the Interim Tariff approved by the Board
but have since stopped making those payments.

Access Copyright has a number
of licences in place in the post-secondary sector that are
due to expire at the end
of December 2015. Some of those institutions have already
given notice that they will not renew their
licences upon expiry. Access
Copyright
projects that its royalty flow from the post-secondary sector will be virtually
eliminated as of January 2016.

(highlight
added)

AC provides no information in this letter about
take-up of its “Choice” and “Premium” license packages, but the foregoing
statement suggests that the response has been virtually zero, since AC is
projecting “that its royalty flow from the post-secondary sector
will be virtually eliminated as of January 2016.”

Notably, Access Copyright will now be required to
answer the Board’s clearly pertinent questions posed in the Board’s the Board’s Order of June 3, 2015. These include questions about the “Premium”
and “Choice” offerings and the state of AC’s licensing negotiations.

It is also notable that Mr. Sean Maguire, a
university student, is continuing as an unrepresented “intervenor”. He is to be
commended for his interest and persistence. However, his involvement can hardly
be considered to be a proxy or even a remote substitute for representation of the
public interest generally or the post-secondary educational sector and does not
change the fact that these hearings are proceeding by way of default for all realistic
purposes. One would have expected that the interests of the college and university communities should have been represented by their respective associations, namely ACCC (now
Colleges and Institutes Canada) and AUCC (now Universities Canada), which presumably had the
resources (assuming the resources were well managed) and the responsibility to
confront AC in this normally adversarial arena.

However, these associations are notably absent
now, having long ago withdrawn as objectors, and having also withdrawn their
objections. As I have pointed out
several times, AUCC and ACCC had already by mid-2012 spent almost three million dollars
($3,000,000) that we know aboutto accomplish apparently little if
anything other than providing a huge amount of interrogatory information for
the benefit of AC and reaching model agreements that have been widely rejected
by their own members. Even this amount of expenditures may not have been
necessary if the associations had taken advantage of the Board’s well-established
policy of requiring only “a reasonable amount of relevant information, from a
reasonable number of institutions…”, which I have pointed out many times
before,including here.

There are also some interesting parallel developments
underway elsewhere in the Federal Court concerning the AC v. York U litigation. The trial
in that matter is set to begin on May 16, 2016 and is scheduled to last for 15
days, which is a rather long time for a trial in the Federal Court. I will
refrain, for the moment, from further public comment about the potential interplay
between the Board case and the Federal Court case and how all of this could potentially
affect the post-secondary community.

The Board seems to have lately increasingly realized
that it can and should, when appropriate, exercise inquisitorial powers (i.e.
to ask its own questions and do its own investigations) in order to deal with
the lack of submissions or inadequate submissions or evidence from one or more
parties. As long as the Board ensures procedural fairness, this kind of
approach is not only OK. It may indeed become more common and potentially necessary
– not only when hearings proceed by default but when there are inadequate adversarial
efforts as we have sometimes seen, even when large amounts of money have been spent.
Will this be how this case plays out? I would not be surprised.

Instead, it is pressing ahead for a consolidated blanket
license-based tariff hearing and seeking some arguably highly overreaching tariff
rates for rights that it arguably doesn’t have for repertoire that it arguably
doesn’t have – and, of course, wants these tariffs to be retroactive and “mandatory”.
Indeed, AC is pressing for a result that is apparently very inconsistent with the Board’s recent provincial
government tariff, not to mention considerable and consistent Supreme
Court of Canada jurisprudence. For
university students, AC wants $35 per year for the period 2014-2017. That is
approximately 70 times or 7,000% higher than the current rate for provincial
government employees. While one can conceive that there is more copying per
capita in universities than in government, it is also conceivable that AC’s
share of the relevant repertoire in universities is even less than in the government
realm and that fair dealing is even more applicable, especially given the inclusion of the
word “education” in s. 29 of the Copyright Act in 2012.

The findings of this Assessment are conditional
upon such completeness, accuracy and fair presentation of the Information,
which has not been verified independently by PwC. Accordingly we provide no opinion,
attestation or other form of assurance with respect to the results of this Assessment.

AC will probably try
to put this report in front of the Copyright Board. Of course, ACCC (now
Colleges and Institutes Canada) and AUCC (now Universities Canada), have both long since withdrawn from this
hearing as noted above and won’t be there to object or to do to the heavy lifting of
cross-examination or to offer any responding evidence if the report is allowed in as evidence. Hopefully, if the report is somehow allowed in, the Board
will at least have some appropriate questions. An excellent starting point for questions
about this “sky is falling” approach is the three-part detailed analysis by
Prof. Ariel Katz from about a year ago, aptly entitled The Loss of Access Copyright Royalties and
the Effect on Publishers: Sifting Fact from Fiction, the
last part of which is here, with links to the earlier instalments. Ironically, the current PwC study is locked up
tight for cutting and pasting purposes – thereby inhibiting “access” to a
significant degree. Thank goodness for OCR technology. Further comments may
follow from yours truly and others.

So, AC is getting its wish for an oral hearing on
its proposed post-secondary tariffs. By pressing for such a hearing, all the while
apparently ignoring the wishes of its best customers (and even suing one of
them to set an example), the public interest, and the rulings of the Copyright Board
and the Supreme Court of Canada, AC may learn that, when it comes to certain
copyright matters, it’s important to be “careful what you wish for”.